The QEII, Resident Aliens, Foreclosure Fix?…..

Happy Halloween everyone. It’s time again for the Mortgages Unzipped Blog roundup. Be safe and have fun this weekend!

The week started out with Chris Jones introducing us to the other QEII.

“But another part of the why is QE (quantitative easing).  That’s a fancy term for “the government flooding the system with money”.  We’ve been trying this as a tool to restart the stalled economy for… oh…about three years now.  My crystal ball tells me it isn’t working, but then I’m just a mortgage guy, not a Harvard PhD in Economics.  One way to quantitatively ease, the normal way, is to reduce the Fed rate.  This is the rate at which the Fed will loan money to its member banks.  That rate was 5.25% as recently as August of 2007.  Now it is between .25% and zero.”

Justin McHood explains residency issues with regard to FHA lending.

“The topic of immigration reform is having a polarizing effect on the nation. It sparks interesting debate on both sides of the issue. I know, I know, my grasp of the obvious is legend! What isn’t quite as obvious is how it could have an effect on mortgage lending, specifically re-financing.”

Chris Jones adds another post regarding foreclosures and the proposal put forth by the FDIC chair earlier in the week.

“Ms. Bair sees this clearly, and has a solution: modify the mortgages.  Well, we are, say the lenders.  No, you’re not, says Madam Bair, and she’s right.  Banks have not been modifying mortgages at nearly the anticipated rate.  And Ms. Bair has a couple of other data points to provide.  The FDIC owns several banks, and has been working out modifications on its own on behalf of those banks.  In the cases where the modifications have resulted in a 10-40% reduction in the monthly payment, the default rate has been halved, she says.”

Lewis Poretz suggests you keep your finger on the trigger if you’re rate shopping.

“For all you consumers attempting to time the market and get the very lowest rate available, I have a few words of advice. Find your target rate, put your finger on the trigger and be ready to lock at a moments notice. Monday was an amazing day for mortgage rates. Well, the morning was… and then the rate changes for the worse began arriving by email from investors. This morning rates opened up even higher and indicators tell us rates will continue to worsen.”

Chris Birk explains how civilians may be able to take advantage of VA Loan programs.

“The VA Loan Guaranty program has some of the most potent home-buying benefits around, chief among them the ability of qualified service members to purchase with no money down.  But few civilians are aware of a little-publicized program that allows them to purchase VA foreclosure properties using many of the same benefits provided to American service members.”

Jeff Belonger shares guidelines regarding have two FHA loans at the same time.

“Why would someone have two FHA loans at the same time? Here are the reasons and the exceptions that may allow someone to have 2 concurrent FHA Loans.
-Increase in family size – There must be an increase in family size in which their current house can’t support the new family member(s). You will have to prove the increase. Also, you must have 25 percent equity in your current home or pay it down to 75% LTV (loan-to-value).  An FHA approved appraiser must be used to determine such new value…..”

Evan Vanderwey takes us back to the fundamentals again with his weekly series. This time he outlines how much house you can buy once you’ve nailed down your finances.

“Let’s say you are after a $1500 payment, and you want to put 10% down on a conventional loan. Without checking first, we start with a particular home that has a sale price of $200,000. You have $20,000 to put down, that’s 10%. The seller is going to pay all of your closing costs.

Your loan amount is $180,000. At 5%, 30-year fixed, the principle and interest payment is $966.28. Tuck that away.”

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